Correlation Between Kedge Construction and Yang Ming
Can any of the company-specific risk be diversified away by investing in both Kedge Construction and Yang Ming at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kedge Construction and Yang Ming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kedge Construction Co and Yang Ming Marine, you can compare the effects of market volatilities on Kedge Construction and Yang Ming and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kedge Construction with a short position of Yang Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kedge Construction and Yang Ming.
Diversification Opportunities for Kedge Construction and Yang Ming
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kedge and Yang is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kedge Construction Co and Yang Ming Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yang Ming Marine and Kedge Construction is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kedge Construction Co are associated (or correlated) with Yang Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yang Ming Marine has no effect on the direction of Kedge Construction i.e., Kedge Construction and Yang Ming go up and down completely randomly.
Pair Corralation between Kedge Construction and Yang Ming
Assuming the 90 days trading horizon Kedge Construction Co is expected to generate 0.85 times more return on investment than Yang Ming. However, Kedge Construction Co is 1.18 times less risky than Yang Ming. It trades about 0.12 of its potential returns per unit of risk. Yang Ming Marine is currently generating about -0.02 per unit of risk. If you would invest 7,510 in Kedge Construction Co on December 4, 2024 and sell it today you would earn a total of 950.00 from holding Kedge Construction Co or generate 12.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.21% |
Values | Daily Returns |
Kedge Construction Co vs. Yang Ming Marine
Performance |
Timeline |
Kedge Construction |
Yang Ming Marine |
Kedge Construction and Yang Ming Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kedge Construction and Yang Ming
The main advantage of trading using opposite Kedge Construction and Yang Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedge Construction position performs unexpectedly, Yang Ming can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yang Ming will offset losses from the drop in Yang Ming's long position.Kedge Construction vs. Da Cin Construction Co | Kedge Construction vs. Kindom Construction Corp | Kedge Construction vs. Huaku Development Co | Kedge Construction vs. Highwealth Construction Corp |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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